This is what markets are doing now, steady as they go. They seem to be range bound. A lot of focus is on President Trump and his health. A lot of focus is on the risk off move we saw friday not filtering today. The yen is retreating, trends study, pound weakening as they start a two week period of brexit talks. Lets get to our top stories. Its been a weakened of speculation over President Trumps health. Sean connolly now admitting to giving a statement about the president receiving oxygen. What do we know about the president s condition right now president s condition right now . Doctors in a press conference sunday sounded upbeat, saying he was improving and could be discharged as soon as later today. But remarks were inconsistent. They withheld information about level,gs and his oxygen john conolly telling reporters the president did indeed receive oxygen friday. Connolly previously said he did not. We also know the president has been given three experimental treatments, remdesivir, and also dexamethasone, which is a steroid usually used in later stages of the virus. So, doctors outside the medical team say it could mean the illness is progressing quicker than expected or he contracted it earlier than previously thought. There are still question marks around the president s condition and were going to have to see if he is discharged later. Francine the president took a surprise of supporters outside walter reed hospital. What has the reaction been . He has taken heat from the medical community, saying the driveby was endangering his staff and secret service agents. Secret service says safety protocols were followed, but the narrative of the president not taking the virus serious and not acknowledging risks. What the president was trying to do was get his face out there, show the American Public and his supporters hes doing well and is ok, especially considering he is off the campaign trail for the foreseeable future. Francine what is the impact on the polls and the election . Were starting to get the numbers trickling out. The president has fallen farther behind against joe biden since last week. An nbc wall street journal poll taken before his covid diagnosis shows biden leading trump by 14 points, the biggest lead of the campaign. Again, that was taken before the president s diagnosis. There was also a survey conducted by reuters taken afterwards. It showed nine out of 10 democrats and half of republicans said trump could have avoided getting sick and he isnt getting sympathy boost. If you look at that clear politics betting odds, the probability of joe biden winning is up to 61 . Francine . Francine thank you so much. Get to the Deputy Director of the Berlin Office center of the marshalls fund of the united states. Thank you for joining bloomberg surveillance this morning. Its been quite a weekend. Its been difficult to ascertain the exact health of the president of the united states. If you like we have a white house thats more transparent . Do we know how sick or have not sick the president is . Guest good morning, francine. This is the storyline of the trump presidency. What does one believe . This white house is known to put out misinformation. In fact, Cornell University put out a study saying President Trump is a large source of disinformation during this pandemic. Its hard to say. Weve seen videos of the president. But weve also received conflicting reports from mark meadows and what doctors are saying. We dont really know. Its ambitious of the doctors to say he can return to the white house monday. Well see how the day proceeds. Francine how will this play out in the election . Will President Trump get sympathy or is this completely against him . Guest i think the voters in america may have sympathy for him. But at the same time, they say he flouted the Public Health guidelines of his own administration, disdaining the use of masks, not paying attention to social distancing, and holding large rallies and events. This whole thing started with the socalled super spreader event in the white house lawn for the event with the Supreme Court nominee, amy coney barrett. So, i think people are also kind of fed up, and the polls show the majority of americans think this is something that could have been aborted. I should also say avoided. I should also say this is breaking down trust in america. This trust was already low before trump entered office. Now people on the left not even believing President Trump may have contracted covid. This shows the state that were in in the united states. Francine does it make a difference if the president gets released today or not . Apart from that, is it about the Vice President s debate this week . Guest certainly all eyes will be on this debate between the Vice President s. Usually, the Vice President pick doesnt have a huge impact on the race. Certainly, you can pick a running mate that would give you a state like indiana, with Vice President pence, with the conservative evangelical voters. That may brings, out the black vote for biden. But will these two candidates, liver is voted in november, will they be able to complete a term in office . This is why people will watch who the Vice President s are. They could step into office before 2024. Quickly, if you look at the polls, do you trust the polls in the u. S. . Or is there still such a big margin of error . Guest my hope is that pollsters have learned from 2016. I think people dont make bets any time now after 2016 on the way the election is going to go. Theres also this phenomenon of the shy trump voter that may not necessarily divulge he or she is going to vote for President Trump. But right now, all the polls seem to be pointing to a win for Vice President biden, and also in those crucial swing states, we saw a poll that said 5 biden was a head i had in ahead in florida. Former speaker boehner, who i berlin, hosted in thought ohio was looking red. Biden is looking at ohio to keep it in place. Francine thank you so much. Now, coming up later today, well speak to the chicago fed president. Well ask him about treasuries and inflation and debt. This is bloomberg. Francine economics, finance, politics. This is bloomberg surveillance. Im Francine Lacqua in london. Happy monday, everyone. Lets get to the bloomberg first word news with leighann gerrans. Leighann reminisced reports johnson is warning the u. K. Faces a tough winter. Speaking to bbc, the public is angry with his handling of the pandemic. He also admitted his governments plan to subsidize dining, eat out to help out, may have helped to spread coronavirus. Now, over in the u. S. , wildfires in california have burned 4 million acres so far this year. Thats a bigger area than the state of connecticut. Its more than during the previous three years combined, and its more than double the previous record set in 2018. The results are devastating. Paris have killed 31 people and destroyed more than 8,400 buildings. Dow jones is reporting President Donald Trump didnt disclose his first positive coronavirus test. It said he took a rapid test on thursday, waited for the results before telling the public. It says he knew of the first was at of test before his appearance on fox news the evening. Global news, 24 hours a day on air and on quicktake by bloomberg, powered by more than 2,700 journalists and analysts in more than 120 countries. I am leighann gerrans. This is bloomberg. Francine . Francine lets get back to the markets. With us is andrew sheets. Thank you, as always, for joining us on bloomberg surveillance. Theres a million questions about the president s health and how that plays into the markets. What are you looking at . Andrew i think there are a couple of things to keep in mind. I think the first is, when we think about this in the context of will it affect the results . Will this be a major change in the campaign . I think so far, this election has been remarkable in that the polling has been extremely stable. Its been that way for a long period of time. In some ways, this is kind of the most stable president ial race the u. S. Has seen in a. Number of election cycles. In terms of the ability of any event, even one as serious as this one to change the direction, thats somewhat minimized and can help explain why Market Reaction so far has been relatively muted. I do think the market understands this has been a relatively stable race and may continue to be that way. Francine what does it mean for the bet on who wins, and what kind of exposure you want in certain Asset Classes . Andrew i think what is most interesting here is that i do think the different outcomes could drive very different styles of what would work in a portfolio. I do think that under a biden administration, especially one where you saw democrats take control of the senate, the markets focus would immediately shift to a much larger, more aggressive fiscal stimulus plan. I think that would potentially drive yields up, drive the yield curve steeper, and drive better performance from smaller, more early cycle, more cyclical stocks. And i think what was somewhat interesting is if you look at the price action on friday, even though the overall market was down, you did see some indications that the market was actually trading in a slightly more economically optimistic type of way. The bottom line, i dont think the question of who wins is the determining factor of whether or not the stock market will be higher in a years time. I think in either candidate winning, we could see that. But it could drive different implications for what would lead that market and what the mix of Market Performance would look like. Francine what do you worry about for the fed . Is there a bout of inflation coming . Andrew i think for the moment, the challenge the fed has is theyve done their piece. Theyve eased aggressively. Theyve done more easing than they ever had. Rethink they are now, they not out of tools, but we dont expect them to cut rates negative. Theyre already doing a large and aggressive qe program. The issue with the fed is the focus has focused to fiscal stimulus. Thats going to be the real driver for the market. Thats actually quite a remarkable thing. Weve been living in the last decade in an environment were Monetary Policy has always been the most important thing. Thats shifting. Were shifting to an environment where fiscal policy is more important. Were seeing that in the daytoday news flow. Speaker pelosi and secretary mnuchin are talking about than what the fed speaker is going to say. I do think the fed has been very aggressive. I think thats been right. But i think now, the real direction of the markets are likely to be driven by fiscal policy than Monetary Policy. Francine will be get some kind of stimulus package in the u. S. . Does the trump illness make it more or less likely . Andrew its a really difficult question. Our base case is still that a deal wont get done before the election. One is a limited amount of time. Two is while its encouraging Speaker Pelosi and secretary mnuchin have been speaking and it does appear the Trump Administration would like to do a deal, whats ignored in all this is that the senate and majority leader mcconnell have never seemed all that warm to the type of deal thats been talked about, and mcconnells been very clear he doesnt want to bring a bill to the floor unless he can get a majority of his members on board with it. And there are challenges with that. So, i still think that all of that is in the view of our Public Policy team at morgan stanley, signs that the odds are below 50 for a new stimulus deal. But after the election, that could very well change. I think that will be the main focus. It could be a reason why, actually a scenario of divided power could maybe be worse for the market in the sense it makes postelection stimulus harder than nondivided power. Francine thank you so much, andrew sheets stays with us. Global infections pass 35 million. We discussed lockdowns and restrictions next. This is bloomberg. Francine this is bloomberg surveillance. Im Francine Lacqua in london. Happy monday. Its going to be a busy week. Were looking at the number of infections. Global infections surpass 35 million. On this side of the atlantic, paris will shut down bars for 15 days. Here in the u. K. , Prime MinisterBoris Johnson is warning of a tough winter ahead. Still with us, andrew sheets from morgan stanley. If you look at the restrictions or possible lockdowns, does it make a difference for what Asset Classes or countries you want to be invested in . Andrew yeah, so actually think that here, its important to keep in mind, what the market probably prefers longerterm, at the risk of stating the obvious, better control of the virus. So, more lockdowns can be fine, maybe even preferable if they result in a better longterm outcome. I think its quite clear that if you dont lock down sufficiently, its a false sense of security. It doesnt fix the problem and the market can see through that. Moving to more restrictions, i dont think thats the real problem. I think the market would be more concerned if it felt like sufficient measures werent being taken to prevent a second wave. For markets, we think this will drive a choppy period ahead of the election. You have covid uncertainty, alexion uncertainty. As we look towards election uncertainty. As we look towards the end of the year, that should receipt. Receipt. Francine where do you want to put your money . Andrew there are a couple things we like. We left to be short u. S. Interest rates. The risk reward is quite good. Again, youre looking forward to a reduction of uncertainty. By december, we should know more about the progress of a vaccine. We should know more about who is the next president of the united states. There are multiple political scenarios that could drive more fiscal stimulus. Longterm u. S. Rates are still near alltime lows. I think those are already discounting that news on the covid front or market uncertainty front. Thats something we like quite a bit. , we also do think fundamentally, you will see a procyclical early cycle rotation in markets. Thats paused the last couple of months, but its still in place since the lows in march. Small caps are outperforming large caps. We still think thats ultimately the right way to position. And we do think that, again, as you look forward into next year, youll probably most likely move back to a period where the dollar is weakening modestly. Its a function of some of that uncertainty declining. Francine is there anything you like in the fixed income space . Andrew i think within all of this, we continue to see the best risk reward within Corporate Credit. Its not the best, most exciting asset class, but thats the point. We do think Corporate Credit is removed from some of these uncertainties around who the next president will be or how bad covid will be, simply because credit be more impacted by the more binary question of, will the recovery continue or not . Its also benefiting from centralbank support. We think Corporate Bond supply, which has been historically heavy in the aftermath of this crisis, that will slow down as companies borrowed the money they need to borrow. In terms of waiting for the uncertainty to clear, we think owning Corporate Credit and seeing that as a relatively lower risk, slightly more boring way to take exposure, is pretty good here through the end of the year. And then it might be a good time to reevaluate, but not until then. Francine andrew, thank you so much. Andrew sheets. Plenty coming up. We also talked about brexit and the Political Risk when it comes to foreign policy. Also, confusing and contradictory. Its been a week of speculation over President Trumps health. We have all the details. We focus on emerging markets. We focus on argentina. This is bloomberg. Francine economics, finance, politics. This is bloomberg surveillance. Im Francine Lacqua, here in london. It has been certainly it weaken. Speculation over President Trumps health, with his doctor admitting to giving a misleading statement about the president receiving oxygen. His inner circle continues to strike an upbeat tone. Pres. Trump it has been a very interesting journey. I learned a lot about covid. I learned it by really going to school. This is the real school. We need to have trust, we need trust that what they are telling us about the president s condition is real. Any confidence in the doctors treating him. He is doing very well, and like it could happen to anybody, but we are prepared. We have a great Vice President , we have a government that is steady. He was in a great mood. He was direct and candid with me as he always is. It was a great conversation. Francine joining me is the latest that with the latest is Senior Writer stephanie baker. Apart from the fact that we learned that the briefings were chaotic, what did we learn about the Presence Health over the weekend . Stephanie i thought the briefing by his doctors yesterday was particularly revealing, while confusing at the same time. The doctors finally admitted that he had received oxygen and that they had started a course of a third therapy called dexamethasone, which is normally only given to Covid Patients who have severe disease and are having trouble breathing. So the picture was quite muddied. They were saying on the one hand that he was doing quite well but that they had started this third therapy, which indicates, from dr. From what doctors say, that his inflammatory markers had risen and that it is usually only given to people who have difficulty breathing. They danced around the issue of where his blood oxygen levels are now and has he received mean, itday, so, i continues to be a confused picture, and we will have to wait to see what they say today. Francine how is this impacting the president ial race . Has it moved the polls, or do we not have uptodate polls yet . Stephanie there was a series of polls that came out over the weekend, which were mostly taken in the wake of the debate, and only part of the time after we heard that he had covid. Indicate thatd the debate performance hurt him. How much is covid diagnosis contributed is unclear, but he is trailing biden in pennsylvania and florida, according to at least one pole. The Trump Campaign senior aide, jason miller, said that trump would get back on the campaign the fiven, and he made he made the surprise driveby with reporters yesterday. He was in a hermetically sealed suv with his secret service aids, and even though they were Wearing Masks and ppe, at least one walter reed doctor said that he posed an unnecessary risk to those agents by exposing them to covid. I think itw, contributes to this picture of chaos around trump. Whether or not he tried to use this illness as a way of educating people, he pivots and he starts talking about the dangers of the on this and what we should be doing and uses it as an opportunity to educate the public we will say. Francine thank you very much. Lets get to first word news with leighann gerrans. Leighann the global number of confirmed Coronavirus Infections has topped 35 million. The daily number of u. K. Cases stored yesterday after a reporting glitch soared yesterday after reporting glitch , twice as many as saturday. The majority of those cases were previously unannounced cases from the week four. Now afp is reporting that the french government plans to shut bring in in paris and new restrictions after the country struggles co to cont new coronavirus case after the country struggles to continue coronavirus cases. Meanwhile, new york city is shutting businesses and schools in parts of brooklyn and queens. That is in an effort to stem a rising Coronavirus Infections. The School Closures will start on wednesday, initially for a period of two weeks. Indoor and Outdoor Dining will also be banned in those areas. Sunday, new york reported its sixth consecutive day of more than 1000 new cases. Global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more im 120 countries, leighann gerrans. This is bloomberg. Francine . Francine thank you so much. Lets focus on market than investments as we are in the Fourth Quarter of a volatile year. Joining me now is the head of international at the Canadian Pension Fund investment board. The cpp i. B. Managed over 309 and over 329 billion in assets. Longer termis much investment, so you take a longer view, but i wonder whether the pandemic and covid19 has changed fundamentally some of the trends youre seeing, and does that change your longterm investment . Good morning, francine, and thank you very much for having me on. And thank you for pronouncing my name properly. It is a rare event for me. Pandemic obviously around the world of investment, forecasting into a bit of uncertainty. Are longterm investors. The shape of our liability curves and the fact that we have cash inflows from a very longterm perspective, from the shortterm is clearly unpredictable, we are well diversified globally and across Asset Classes that we are sticking to that fully diversified portfolio now. The pandemic will obviously accelerate some trends we have seen in the market. We have shifted across businesses and industries and we certainly are intending to take advantage of that. Consumer behavior, as you have covered many times on your show, ecommerce transitions, that was starting to happen, has certainly been accelerated, and some of our recent investments are taking advantage of that trend. Health care is going to be delivered to consumers, that is also something that will be affected longterm and somewhat accelerated in terms of the transition. Look at cities and infrastructure, there is no shortage of bait as to what that of debate as to what that will do to office parks and so on, and these are clearly, in some segments, aspects that we are looking at. Finally, the Global Supply chains will be affected, whether there is decoupling or not with china, i think companies are certainly looking at how we will need to respond to longterm trends, and again, that is something that we are very focused on, taking a longterm approach allows us to. Francine when you look at the Interest Rates that will be low for quite some time, how fickle is it to be in the search for yield . You have to take more risk even if youre longerterm . Alain you do. Joined 12k to when i years ago. Our mandate is to ensure that the to ensure the longterm viability of the pension system. That cost of capital was the same. The hurdle rate, on the assets we managed, we need to make sure the most term longterm sustainability of the ccp. That was easier. 12 years ago you did not have to construct the k same type of portfolio. The cost has not moved. However, to your point, Interest Rates have gone lower. Asset pricing has reflected that trend over the last 10 to 12 years. You have to face a world where Interest Rates are likely to be lower for longer. We have shifted our portfolio composition to reflect that. Our portfolio has 85 equity risk embedded into it, structured in different ways. That has forced us to be a lot more handson, a lot more active, and to take a much more fully involved view in terms of how we manage our assets longterm. So there is no doubt that you could argue the risk portfolio has increased to meet that challenge, but we still feel it is well within our comfort zone. Francine one thing you were saying is that you Like Health Care at the moment, you like the ecommerce platforms, but is it a trend that was already there . So what do you do with sustainability . Is it a trend that was there, but the pandemic accelerates the change, or could there also be new chains new trends that emerge from the pandemic . Alain i think it is a bit of both. The number of funds investors were already talking about esg and some of these changes. I think the pandemic has brought that into focus. It has accelerated, as i was saying, some of that transition and probably the urgency of transitioning may be faster than people anticipated. I think frankly, if you assume a lot of people will be working from home that you will be that people will be paying for ares differently, and forced to adopt these new methodologies and new channels. It certainly will have accelerated the trend. On the other hand, you could argue that some of these things that were not trending before now become real potential trends, such as real estate, what happens to city centers and how people work and congregate in offices. So you put that altogether, and i think we are witnessing a change in the way people consume in a way that will not only accelerate but shift in different ways. Thanks so much. Alain carrier stays with us. Talkg up later today, we with e. U. Commission Vice President. That is at 4 00 p. M. This afternoon, and this is bloomberg. Announcer thifrancine this isg surveillance. Lets get to the uber business flash. Is closingcineworld theaters in the u. S. And the u. K. Pulling the plug on the james bond movie, one of the few big films left on the 2020 calendar. Theworld is set to say that lack of blockbuster releases is making the industry nonviable. Doug jones reports the social networks is an effort to break up the main site from its subsidiaries, instagram and whatsapp, is a complete nonstarter. It is fighting a paper prepared by Company Lawyers which says the move would cost billions of dollars and have and harm consumers. To buy in angreed unsure joe to create one of the biggest payment provided in europe. The company will have revenue annually of 1. 8 billion euros, and a market value of 15 billion euros. The deal has taken more than a year to complete. That is your Bloomberg Business flash. Francine lets go back to the market, and still with us is at alain carrier. Thank you for staying with us. We were talking about these low yields and exec and what it meant for your investment strategy. How focused are you on the emerging markets, and do dollar dynamics change that in the near future . Alain we are very focused on emerging markets. Diversified across Asset Classes and across geographies. We have been public for about the fact that we have wanted emerging markets to represent up to one third of our portfolio between now and 2025, and things are well on the way to achieving that. At for us the focused reggie when it comes to emerging markets, were talking about china, india, the south asian countries, and a few countries in south america. But they are critical in terms of spreading the risk, diversification, and also access to uncorrelated returns. Ad we think that as part of well constructed portfolio, it return per unit of risk across attire that across an entire portfolio and we feel that it is prudent for a fund of our size, but also with the Growth Profile we have is a fun. Francine how do you choose the emerging markets where you want to be invested in here alain . Today the fund today, we are at about 450 billion, canadian trajectory on 1 trillion, to 2 trillion down the road. So scale is critical. We are handson investors, where mostly direct investors in Asset Classes so we look for markets where we can achieve scale, and make sense of the amount of effort and also the focus that we need to apply to some of these markets. That is why we typically will withe to be very active officers, boots on the ground, hands on management, partnership in emerging markets to achieve that scale, and that is why it is somewhat limited. We talked about supply chains. Will supply chains change significant because of the trade wars we have seen and the way Current Affairs are headed . Alain it is one of the Big Questions that i referred to earlier about the coupling. There is a lot of political around reassuring the number of supplychain elements. I cannot say we have seen a lot of that happening, but definitely the political discourse is not positive. There is certainly a risk that two polesnd up with of innovation and two very separate worlds in terms of supply chain, and that is something we are prepared for. We are trying to hedge our bets, and the way we invest we in china, north america, we are partnering with some of the best companies in the sector, but it is a risk we are quite focused on. Wencine one of the things have been trying to figure out, i know you are much longer term, inflation we change everything in terms to ruthie focus on debt. Is that something that you are worrying about, or is it going ,o be in the next 18 months something that you will change positions on . Toin it will not force us change our position shortterm, thats for sure. Where are worried about unexpected movement. I am not an economist. We have a number inhouse, it is not something that we expect shortterm. Thecine when you look at best Asset Classes across what youre doing, is there a difference with equities, or do you look at currencies . How do you break that down . Alain we invested in a number of different currencies, and we typically dont hedge. We express our assets and chain dollars. There is a natural hedge between Canadian Dollars and the number of global currencies is commoditiesbased. In Global Economic output were economies are weaker, flatter, they act as an offset to some of our reports, and so we have managed Global Investment currencies which by and large actually makes it more stable. So, yes, we do in some cases, especially as you mentioned with the u. S. Dollar and the risk of incline in the u. S. Dollar, it has crashed quite a bit recently and that would have been something that affected the portfolio, but given what we are there is afolio, pretty significant strain that swings it. Francine thank you so much for carrierus today, alain. Coming up, possible changes are coming for germanys frech mark index. With the owner of the dax next. This is bloomberg. The president has continued to improve. As with any illness, there are frequent ups and downs over the course, particularly when a patient is being so closely watched 24 hours a day. Francine that was President Trumps physician, dr. Sean connolly. We are also getting breaking news. Joint take your of your interest from the see global payments, part of the Payment System from. Esterday was going to buy sia a lot going on in sin tech. Lets talk about the dax, and the movement therewith that global benchmark. Dani the company that owns the dax has been proposing new changes that will be debated, and whether or not they go into effect will be decided in november. The big thing here is about who and the types of requirements as the dax will used to admit new admit new members. A lot of this you have to imagine is partially response to wirecard. Her example, some of the new puzzles include a new committee that would look over their accounting, and also look over there risk controls. So this Audit Committee has to assess all of the quarterly reports that comes out of the committee. There are also new measures put in place to judge who gets admitted, things like profitability as well as liquidity. Recall, francine, after the scandal at wirecard and the Company Became in column insolvent, it took about two months for the dax to remove the company from its index, so this perhaps could help to that. Some of the other interesting tidbits in here include a ban on companies that are involved in controversial weapons. We dont know yet who this will include. They say there is one company in the m dax that will be taken out of the screening. It could be airbus, for example, it could be ryan mattel, it could be a few German Companies that are involved with weapons manufacturing, so that at the moment, we are not sure who that would include. Finally, the big chain here would be the dax expanding, becoming 40 members instead of 30. The m dax getting 10 additional members, sorry, 10 few members, becoming 50 instead of 60. Francine dani burger with the latest on the decks. Bloomberg surveillance continues in the next hour. Tom keene joins me out of new york, and later we will have a conversation with the chicago fed president. A conversation in general about what is going on in the market. A couple of people watching the program. Also writing and saying there is a disconnect with what we are seeing on the markets with the vix. We will export that a bit further. This is bloomberg. Francine President Trump might be released from the hospital as soon as today, despite conflicting reports from doctors on his treatment and health. Markets recover from fridays riskoff turn. Last call. France reportedly plans to shut down bars in the paris region as part of new coronavirus measures to be announced today. An summit showdown. Brexit negotiators praise for two weeks of tense negotiations. President macron has the key. Good morning and welcome to bloomberg surveillance. Im Francine Lacqua in london. Tom keene is in new york. We track the markets as always, but we have had quite an incredible weekend where it was difficult to know the state of the health of the president of the united states. There were many questions about that, but this morning the markets seem to be calming. Is question about what the president will do today from the hospital